WEBCASTEXECUTIVE REWARDS 2012:ASIA PACIFIC AND GLOBAL TRENDS
Asia Pacific: Current Executive Rewards Landscape What companies in Asia are dealing with     Governance:                 ...
Asia: Current Executive Rewards LandscapeResults of Mercer’s Executive Rewards Snapshot Survey                            ...
Asia: Current Executive Rewards LandscapeResults of Mercer’s Executive Rewards Snapshot Survey                            ...
US: Pay/Performance, legislative and regulatory trends • Changes in US executive compensation levels and practices are mod...
Europe: Current trends“The shareholder spring”    Country                                                Shareholder activ...
The changing face of executive rewardsExecutive rewards pressures around the world          Legislative or Regulatory Resp...
Additional details To view the full audio and web portion of the webcast - click here For further insight into executive r...
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Mercer Asia Pacific And Global Executive Remuneration Trends Webcast 2012

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Globally, investors are becoming increasingly forthright with their views on executive pay driving responsible executive remuneration practices around the world. Through the slides we share the highlights of key executive rewards trends in US, Europe and particularly Asia Pacific.

You may also view the entire audio and web recording on :
http://bit.ly/JwjNBa

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Mercer Asia Pacific And Global Executive Remuneration Trends Webcast 2012

  1. 1. WEBCASTEXECUTIVE REWARDS 2012:ASIA PACIFIC AND GLOBAL TRENDS
  2. 2. Asia Pacific: Current Executive Rewards Landscape What companies in Asia are dealing with Governance: • Developing a remuneration policy and for whom? Higher Level • Drafting remuneration committee report and more transparentAccountability on Boards communication with shareholders • Hong Kong & • Advice on how disclosure can be enhanced, including on Singapore: Enhanced decision making process disclosure requirements • How to align remuneration with strategy • India: compensation guidelines for Banks – Much more detailed assessment of performance against both annual- & long-term objectives • Australia: two negative – Development of individual performance scorecards for STIs AGM votes on and collective scorecards for long-term plans Remuneration Committee report can • Financial & Non-Financial Performance Metrics result in Board spill • How to simplify our executive remuneration structure? • Charter and work plan for remuneration committee • Advice on actual equity grant process MERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 1
  3. 3. Asia: Current Executive Rewards LandscapeResults of Mercer’s Executive Rewards Snapshot Survey • Base pay increases in developing Asia Pacific still higher Base Pay than in the developed world • But increases for FY13 likely to be lower than in FY12 • Asian companies in Asia provide more aggressive incentive Structure of Pay pay (STI and LTI) compared to Western companies in Asia • Greater flexibility • More balanced approach to top- and bottom-line measuresDefinition of Performance • More discretionary • Increased usage of both service and performance contingent Type of Plan restricted share plansMERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 2
  4. 4. Asia: Current Executive Rewards LandscapeResults of Mercer’s Executive Rewards Snapshot Survey • Asian companies more inclined to irregular, ad-hoc grant Characteristics patterns Of LTI Plans in Asia • Asian companies are: – Making changes to their LTI plans (30%) – in light of economy, global market trends and to gain competitive advantage – Larger grant size (36% expect increase) – More individual differentiation (27% expect increase) – Greater usage for retention purposes (18% expect increase) – Use of stock options (9% expect decrease) – Used of cash- based LTI (18% expect decrease)For more details on 2011/2012 Asia Executive Remuneration Snapshot Survey - click here MERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 3
  5. 5. US: Pay/Performance, legislative and regulatory trends • Changes in US executive compensation levels and practices are modest as political, shareholder, and societal focus remains high • Executives saw base salary increases in 2011 in line with other employees (about 2% at median), a trend expected to be continued in 2012 • Prevalence of long-term incentive vehicles continues to shift away from service-based restricted stock in favor of performance awards • Say on Pay (SOP) and institutional shareholder groups continue to exert a strong influence on executive compensation in the US – SOP became mandatory for most US public companies in 2011 – In 2011 and to date in 2012, approximately 98% of companies received majority support for their executive pay programs – Institutional shareholder advisors, such Institutional Shareholder Services (ISS) and Glass Lewis & Co., are significantly influencing SOP vote results Sample: 233 companies in the S&P 500 Index.MERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 4
  6. 6. Europe: Current trends“The shareholder spring” Country Shareholder activism The shareholder spring has seen the resignation of three Chief Executives • Andrew Moss resigned from Aviva after 59% of shareholders did not back the remuneration report • AstraZeneca Chief Executive David Brennan recently announced his resignation, following shareholder pressure UK • Sly Bailey of Trinity Mirror has resigned amid growing shareholder anger over remuneration At William Hill 49.8% of shareholders voted against director pay packages 31.5% of Barclays shareholders (including abstentions) failed to back its remuneration report after Chief Executive Bob Diamond took a £17.7 million pay package for 2011 Just over 30% of Premier Foods shareholder votes failed to back the remuneration report Almost 37% of UBS shareholders voted against the bank’s compensation report, after the bank took a Switzerland $2.3 billion loss from unauthorized trading 31.6% of Credit Suisse investors opposed the banks remuneration plan US voting advisory firm, Glass Lewis, has recommended that Deutsche Bank investors do not sign Germany off on the supervisory boards actions in 2011, this was sparked by investors anger at a lack of clear succession planning at the bank. There has been a notable increase in shareholder activism in Europe, led by the UK Investor discontent is increasing, particularly in the financial services sector, with an outbreak of “no” votes on remuneration reports being seenMERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 5
  7. 7. The changing face of executive rewardsExecutive rewards pressures around the world Legislative or Regulatory Response to Speed and Global Nature of Change Shareholder Discontent • Dialogue within annual cycle not over • Potential for binding vote on executive pay interim period between cycles • More specific rules on pay constructs • Globalization of governance cycle • “Shareholder Spring” in UK • Increased speed of change Focus on Performance Outcomes are Key • Shareholder advisory group “pay for • Definition of performance goals / objectives performance” tests • Focus on long-term plans • Performance relative to home economy • Model outcome scenarios; partnership with financeMERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 6
  8. 8. Additional details To view the full audio and web portion of the webcast - click here For further insight into executive remuneration trends, visit www.mercer.com/perspective or www.mercer.com/erperspectivesasia Hans Kothuis Asia Pacific Business Leader – Rewards Consulting Mercer +852 3476 3817 hans.kothuis@mercer.comMERCER Copyright 2012 mercer LLC. All rights reserved. May 28, 2012 7

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